We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Update on #Cryptocurrencies #BITCOIN -0.91% #BITCOINCASH +1.48% #ETHEREUM -1.58% #RIPPLE -1.35% #LITECOIN -2.48%
  • $AUDUSD pushes further into multi-month highs this morning as risk appetite improves https://t.co/jCjpOT2kbP
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.98%, while traders in US 500 are at opposite extremes with 73.36%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ZZhiVDU0Ey
  • The #Euro Stoxx 50 has made a firm break away from its 50% fib retracement to trade at its highest level since early March. Get your equities market update from @JMcQueenFX here:https://t.co/TeIdfHjbUj https://t.co/IPSBuPQ3YF
  • New York Virus cases rise 0.4% compared to 7-day average of 0.3% - BBG
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 2.91% Gold: -0.86% Silver: -2.61% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/slar5zMmAp
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.19% 🇳🇿NZD: 0.91% 🇨🇦CAD: 0.47% 🇪🇺EUR: 0.35% 🇨🇭CHF: -0.08% 🇯🇵JPY: -0.94% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/212TNo9F85
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.45% France 40: 0.14% US 500: 0.11% Germany 30: 0.11% FTSE 100: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/hJWuqYgXB7
  • Hey traders! Why is US indices a good benchmark? Find out from @DailyFX Chief Strategist, @JohnKicklighter 👇 as he covers the US market highlights today! https://t.co/cRetV7qC8m
  • US Treasury Yields: 2-Year: 0.158% 3-Year: 0.199% 5-Year: 0.308% 7-Year: 0.507% 10-Year: 0.669% 30-Year: 1.470% $TNX
Crude Oil Analysis: Oil Price Bounce Short-lived

Crude Oil Analysis: Oil Price Bounce Short-lived

2018-11-27 09:00:00
Justin McQueen, Analyst
Share:

Oil Price Analysis and News

  • Oil Bounce Short-lived
  • Net Long Oil Positioning Drops to Lowest Since September 2017

For a more in-depth analysis on Oil Prices, check out the Q4 Forecast for Oil

Oil Bounce Short-lived

Yesterday’s bounce back has provided an opportunity for oil bears to reload shorts. The lack of conviction in the rise in oil prices suggests that any increase will be short-lived as markets look to find a floor. As we head to the G20 summit and OPEC meeting, it is likely that there will be increased talk regarding the size of production cuts to be announced for the December 6th OPEC meeting. However, with recent bearish reports surfacing yesterday, where Saudi Arabia are currently pumping oil at a record high of 11.1-11.3mbpd, a large cut to production would be needed to provide a modest lift in oil prices.

As a reminder, back in September, both Saudi Arabia and Russia agreed to boost production by 1mbpd in order to cool prices. As such, it is likely that a 1mbpd cut has to be the minimum level to be considered, as anything lower may extend to sell off in oil prices. Although, with Russia, Saudi Arabia and the US currently pumping oil at record levels, (34.4mbpd combined) a reduction of 1mbpd may not cut it, while anything significant is likely to be heavily criticized by President Trump.

Crude Oil Analysis: Oil Price Bounce Short-lived

Source: Reuters. Oil production from Russia, US and Saudi Arabia.

Net Long Oil Positioning Drops to Lowest Since September 2017

Given the near 30% plunge in oil prices, money managers have liquidated their long positioning, bringing net longs to the lowest level since September 2017. As net longs continue to remain relatively substantial, this poses a risk for further downside in oil prices.

Crude Oil Analysis: Oil Price Bounce Short-lived

Source: Refinitiv. Brent crude oil net positioning via CFTC data.

What Traders Need to Know When Trading the Oil Market

Important Difference Between WTI and Brent

OIL PRICE CHART: Daily Time-Frame (Aug 2017-Nov 2018)

Crude Oil Analysis: Oil Price Bounce Short-lived

Chart by IG

As the Relative Strength Index continues to hover in oversold territory, this suggests that an attempt of a rally has been sold into. Key support is situated at the $57.00 level, which roughly coincides with the 50% Fibonacci retracement of the 2016 low to 2018 high. The outlook for oil prices remains weak, with the oil curve remaining in contango. However, given the size of the sell-off at the backend of last week, the downside could be somewhat overdone.

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.